control and sovereignty over key national assets, infrastructures and development strategies. This opens up the possibility of a democratic defi cit within the WTO, with nationally agreed and democratically determined systems of regulation laid open to challenge through their potential confl ict with principles of non-discrimination and equal access (Ledebur, 2004;
Ransom, 2000).
In response, the EU is currently taking forward initiatives in areas such as corporate social responsibility and labour standards (Europa, c and d).
The Doha Round has involved major clashes of interest between developed and developing nations, pushing back the timetable for agreement to the next Ministerial Conference of the WTO in December 2005. Despite the EU’s willingness to engage in this round and a bevy of proposals on many of the issues, the underlying neoliberal principles of the WTO remain intact (Ainger, 2003). These principles are perceived by many as advancing the
‘race to the bottom’ without genuinely tackling the intractable issues of international development, to which we now turn.
capital into priority sectors such as infrastructures and education, can be addressed. Critics contend that globalization and liberalization, far from advancing the interests of developing economies, rather lock them in to a spiral of defi cit, debt and adjustment (Burbach, 2004). Taking the argument further, it is contended that in fact those structures of dependence crystallize the historical roots of globalization and a long-existing pattern of trade relations loaded in favour of the core (Frank, 1978). Globalization is not new (Modelski, 2003). Thus for some, post-colonial policy and neoliberal globalization simply continue and adapt a pre-existing pattern of imperialism (Ainger, 2004; Loomba, 1998; Biel, 2000).
On the other hand, a rival literature posits that it is the lack of economic relationships with the West and various internal blockages to such relationships that is diluting and deterring the otherwise progressive role of Western capital and technology (Krugman, 1996; Warren, 1980; Economist Surveys 1998; 2001, pp. 10–15; 2004b, pp. 4–5, 11–12).
Without doubt, there is a distance between the EU’s rhetorical commitments to development and its record. The persistence of literally enormous gaps in living standards between the developed and developing world – whether measured by GDP per capita or the Human Development Index – illustrate the limitations of the EU’s development policy to date.
With the emergence of the WTO and the perceived failures of policies of development aid in the past, the EU’s development policy has seen a switch of emphasis from aid to trade and the opening of markets.
This is refl ected in the evolving relationship between the EU and the ACP countries (Europa, e, f, g and h). The EU has operated a series of agreements with the ACP countries through successive Lomé conventions which sought to provide the African, Caribbean and Pacifi c economies with a mixture of aid and mechanisms for stable and preferential access to the European market in their key export sectors (Europa, f and g).
Of course, this very focus on key existing specializations may, as suggested above, have deterred precisely the economic diversifi cation and modernization that was necessary for development. Considerable evidence suggests that the focus on the export of cash crops and commodities across the developing world has been self-defeating, directly contributing to oversupply, environmental degradation and a worsening of the terms of trade (Anon., 2003).
At the same time, aid packages were much criticized for their implication of the EU in support for regimes which failed to protect basic human and civil rights and/or which fed corruption and militarization (Ainger, 2004;
Economist Survey, 2004b, pp. 4–5, 12).
The Cotonou agreement refl ected the neoliberal focus on trade not aid, while still providing resources for the building of trade capacities. Seventy-
eight countries signed the agreement, which paved the way for new, separate economic partnership agreements for each of the African, Caribbean and Pacifi c regions (Europa, h). These agreements will come into force in 2008 as the transitional Lomé IV agreement runs out. The new accords fi t into the WTO framework, unlike Lomé, which, in providing guaranteed access to the EU market for ACP bananas, was successfully challenged by the US and Latin American states, prompted by several major US agro-corporations (Ransom, 1999).
Key features of the new EU development policy are the concession of complete market access to the least developed countries (41 ACP countries qualify for this) under the ‘Everything but Arms’ initiative and targeted tariff reductions in textiles, clothing and footwear (Europa, h). In textiles, the EU has removed all quantitative restrictions (Europa, i).
Additional concessions have been made available under the ‘Generalized System of Preferences’ for developing countries meeting certain international environmental and labour standards (Europa, f). The EU has also made some limited moves on the social and labour agenda which are not explicitly included in the Doha Round (Europe, c and d). Finally, the EU is ‘committed’
to ensuring that developing nations’ interests are taken into account in the Doha negotiations around competition laws (Europa, l).
These initiatives are welcome, if rather limited. They do not directly address many of the issues around sustainability, labour treatment and social responsibility through ‘hard’ regulatory and legal measures; and the thrust remains towards the opening of markets and extending the liberalization of trade and investment. Whilst acknowledging critiques of WTO liberalization, the EU is not proposing a pulling back of the liberalization agenda.
At the same time, the EU continues to operate policies in the fi eld of agriculture and agro-industries which not only directly reduce market opportunities for developing countries in the export of basic foodstuffs and cash crops, but also the export of semi-manufactured goods, restricting the opportunities for developing countries to consolidate more remunerative upstream industries in the processing of goods such as sugar, coffee and chocolate The EU’s protection of agriculture has contributed to a major dislocation of world trade and a severe squeezing of opportunities for developing countries, arguably maintaining the market structures of dependence, unequal exchange, monopsony, oligopoly and corporate control which are held by some to reduce the effectiveness of trade liberalization as a tool of development (Bunsha, 2003).
In this way, the EU’s external trade policies closely match its economic interests, pushing for an opening of developing countries’ markets on the grounds of economic liberalism without then offering access in sectors
where it stands at a competitive disadvantage. Much the same can be argued in relation to the USA, leading to growing demands from the G-77 group of developing countries for movement on the agricultural issue in the current Doha Round. The EU has responded to this agenda with further reform of the CAP which, while improving market access and cutting tariff and other barriers, has the effect of maintaining heavy subsidy of the sector through the repackaging of support to farmers (Europa, j, k). European farmers will receive a single payment, breaking the link between subsidy and production but transferring much CAP support into the ‘blue’ and ‘green’ categories of farm support deemed to be less ‘trade-distorting’ and hence meeting WTO rules. It remains to be seen whether this will fully address the concerns of developing nations over the protection of European agriculture and the consequent squeezing of their already scarce opportunities to generate export earnings.